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Council receives FY 2023–24 audited financial statements; auditors issue clean opinion
Summary
Independent auditors issued an unmodified (clean) opinion on the City of Costa Mesa’s FY 2023–24 financial statements; council received the annual comprehensive financial report and staff outlined reserves, general fund performance and housing authority activity.
The City Council received the City of Costa Mesa’s audited financial statements for the fiscal year ended June 30, 2024, during the Feb. 18 meeting. Independent auditors (Davis Pharr) issued an unmodified, or “clean,” opinion on the city’s comprehensive annual financial report, staff said.
Finance Director Carrie Tai (presentation led by Director Molina and Finance Manager Anna) told council that the city reported $225 million in revenues and transfers in and $181.4 million in operating expenditures across all funds for FY 2023–24; after transfers and debt service the city’s combined fund balance increased $9.9 million to about $149.8 million. The general fund ended the year with total reserves of approximately $60.4 million and an unassigned fund-balance increase of roughly $1.3 million, staff reported.
Staff highlighted key revenue variances: property tax receipts rose about 5.7% year over year; cannabis-related revenues increased as new businesses came online (staff explained some part of the cannabis figure represents taxes while other receipts are fees and related revenues); hotel-transient-occupancy tax rose; and overall sales tax receipts declined approximately 4.3% compared with the prior year. Staff said sales-tax receipts are remitted with a lag and that holiday-season receipts for the current fiscal year would arrive later in the reporting cycle.
The housing authority (successor housing entity) funds were essentially net‑neutral for the year, with an $8.3 million balance that includes set-asides for homeless programs, Costa Mesa Family Village, a first-time homebuyer program and rental assistance. Staff also noted there were no material instances of procurement or investment noncompliance identified in the audit and that the city received the Government Finance Officers Association Certificate of Achievement for excellence in financial reporting.
Council received the audit without objection. Staff told council the finance team is preparing the midyear fiscal review for 2024–25 and the proposed budget and CIP for FY 2025–26, with planned presentations in March and April.
